Callaway Golf Company and Topgolf International Inc. announced that the companies have completed their previously announced merger, following approval by shareholders of both companies.
“Callaway and Topgolf are just better together,” said Chip Brewer, president and chief executive officer of Callaway. “Callaway’s leadership in the global golf equipment market and geographic diversity, combined with Topgolf’s revolutionary technology platform and access to golfers of all abilities, will allow both companies to accelerate growth and create competitive advantages. This transformational merger has already created and will continue to create meaningful shareholder value. We are very excited to begin this next chapter and I cannot wait to see what we can accomplish together.”
Erik Anderson, executive chairman of Topgolf, added, “I am tremendously proud of everything we’ve achieved at Topgolf since our founding in 2000. Our dedicated team of associates, groundbreaking Toptracer technology, and proprietary venues and media platforms have transformed the intersection of sports and entertainment. Together with Callaway, Topgolf has the opportunity to build upon its rapid growth story, bring the Topgolf experience to new communities and advance our mission of making golf a more inclusive and accessible game.”
Transaction Details
Under the terms of the merger agreement, which was previously announced on October 27, 2020, Callaway issued approximately 90 million shares of its common stock to the shareholders of Topgolf, excluding Callaway, which previously held approximately 14 percent of Topgolf’s outstanding shares. Immediately following the merger, Callaway shareholders owned approximately 51.3 percent and former Topgolf shareholders (excluding Callaway) owned approximately 48.7 percent of the outstanding shares of the combined company.
Board of Directors for the Combined Company
The combined company’s Board of Directors now consists of 13 directors, including three new directors appointed by Topgolf shareholders. Chip Brewer will continue to lead the combined company as president and chief executive officer. Dolf Berle will continue to lead the Topgolf business through a transition period, at which time he intends to step down to pursue other leadership opportunities. John Lundgren will continue as chairman of the board of the combined company, while Erik Anderson will serve as vice-chairman.
The combined company will be headquartered in Carlsbad, CA with Topgolf continuing to operate from its headquarters in Dallas, TX.
Goldman Sachs served as the financial advisor and Latham & Watkins LLP served as legal counsel to Callaway. Morgan Stanley & Co. LLC and J.P. Morgan served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to Topgolf.
Notice of Inducement Equity Awards
In connection with the merger, and effective as of the closing date, Callaway granted to 189 employees of Topgolf an aggregate of 385,389 inducement performance stock unit (“PSU”) awards (at the target level) and an aggregate of 456,274 inducement restricted stock unit (“RSU”) awards. The awards were granted under Callaway’s 2021 Employment Inducement Plan, which provides for the granting of equity awards to new employees of Callaway. The RSU and PSU awards were approved by Callaway’s Board of Directors and/or Compensation and Management Succession Committee and were granted as inducement material to the new employees entering into employment with Callaway, in accordance with New York Stock Exchange Rule 303A.08.
The RSU awards will vest and the restrictions will lapse in three equal annual installments commencing on the one-year anniversary of the grant date, subject to continued employment through each applicable vesting date.
The PSUs will vest after three years based on performance against certain corporate financial objectives over a three-year performance period beginning January 1, 2021 and ending December 31, 2023. The number of shares earned under the PSUs maybe 617,689 in the aggregate if maximum performance is achieved during this three-year period. However, the final vesting of the PSUs will not occur until the third anniversary of the grant date, following the end of the three-year performance period, and will be subject to continued employment through that date.
Callaway Golf”s brands include Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin.
Photo courtesy Topgolf
